IndianOil registers a net loss of Rs. 3,719 crore
New Delhi 11-Aug-2011

Mr. R S Butola, Chairman, IndianOil

IndianOil (IOC) has posted a wider loss for the three months ended 30 June mainly because of selling petroleum products below the market price and on higher interest payments.

India's largest oil marketing company on Wednesday reported a net loss of Rs. 3,719 crore for the June quarter, against a loss of Rs. 3,388 crore a year earlier. Revenue increased 28% to Rs. 99,757 crore.

Chairman and managing director R.S. Butola attributed the wider loss to higher unmet under-recoveries, or the notional loss on selling fuel below cost, along with increasing interest rates.

Total under-recovery for IOC, which has a 49.6% share in the country's fuel retail market, for the quarter was Rs. 23,806 crore, of which Rs. 7,932 crore was given as discounts by upstream companies Oil and Natural Gas Corp. Ltd, Oil India Ltd and GAIL (India) Ltd.

IOC has received a letter from the government for a reimbursement of Rs. 8,201 crore, leaving it with a net under-realization of Rs. 7,673 crore. The company also suffered a Rs. 900 crore inventory loss due to the removal of 5% customs duty on crude on 26 June, and paid Rs. 467 crore more on account of higher interest on borrowings. Gross refining margin (GRM), the difference between the total value of petroleum products sold and the price of crude, rose 57% to $4.71 (around Rs. 210) a barrel.

IOC, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd would have together posted an additional net profit of Rs. 5,246 crore for the year ended 31 March had they not absorbed a notional cumulative loss of Rs. 6,894 crore on selling fuel below cost.

IOC is losing Rs. 143 crore a day because it sells petrol, diesel, kerosene and cooking gas at a loss of 85 paise per litre, Rs. 6.82 per litre, Rs. 24.93 per litre and Rs. 247 per cylinder, respectively. The company's borrowings stood at Rs. 67,458 crore at the end of the June quarter, an increase of Rs. 14,724 crore in the quarter.

“The government does not have the kind of money to underwrite under-recoveries to such a large extent. At some stage, in spite of potentially inflationary pressures, reduction in diesel subsidy is inevitable,“ said Anish De, chief executive at Mercados EMI Asia, an energy consulting firm.

In response to a question on petrol price, Butola said: “We are monitoring the price situation... If there is significant reduction (in crude oil price) from current levels, there would be a cause for us to re- view prices.“

The price review does not depend only on product price but also on the dollar-rupee exchange rate, said P.K. Goyal, director of finance at IOC.

The company, which annually imports 1.5 million tonnes of oil from Iran, plans to make an outstanding payment of 387 million (around Rs. 2,510 crore) through a Turkish bank this month.

“Of the total outstanding of 460 million to Iran, we have already made a payment of 73 million. During the current month, the balance payment will be made in next 15 to 20 days through a Turkish bank,“ Goyal told reporters.

IOC shares fell 3.5% to Rs. 326.35 each on the Bombay Stock Exchange on Wednesday, while the benchmark Sensex index gained 1.62%.

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User agrees to indemnify, defend and hold IndianOil harmless from and against all losses, expenses, damages and costs, including reasonable attorneys' fees, arising out of or relating to any misuse by the User of the content and services provided on the Site.
The information contained in the Site has been obtained from sources believed to be reliable. IndianOil disclaims all warranties as to the accuracy, completeness or adequacy of such information.
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The term User shall refer to the user who is browsing the site. The term IndianOil shall refer to Indian Oil Corporation Limited. The term Site refers to www.iocl.com owned and monitored by IndianOil.
By using the Site, you agree to follow and be bound by the following terms and conditions concerning your use of the Site. IndianOil may revise the Terms of Use at any time without notice to you. Areas of the Site may have different terms of use posted. If there is a conflict between the Terms of Use and terms of use posted for a specific area of the Site, the latter shall have precedence with respect to your use of that area of the Site.
ndianOil may terminate User's access at any time for any reason. The provisions regarding to disclaimer of warranty, accuracy of information, and indemnification shall survive such termination. IndianOil may monitor access to the Site.
All content present on this site is the exclusive property of IndianOil. The software, text, images, graphics, video and audio used on this site belong to IndianOil. No material from this site may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from IndianOil. All rights not expressly granted herein are reserved. Unauthorized use of the materials appearing on this site may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. IndianOil is a registered trademark of Indian Oil Corporation Ltd. This trademark may not be used in any manner without prior written consent from IndianOil.
IndianOil does not make any warranties, express or implied, including, without limitation, those of merchantability and fitness for a particular purpose, with respect to any information, data, statements or products made available on the Site.
The Site, and all content, materials, information, software, products and services provided on the Site, are provided on an "as is" and "as available" basis. IndianOil expressly disclaims all warranties of any kind, whether express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
IndianOil shall have no responsibility for any damage to User's computer system or loss of data that results from the download of any content, materials, information from the Site.
IndianOil may change or discontinue any aspect of its website at any time, including, its content or features. IndianOil reserves the right to change the terms and conditions applicable to use of the Site. Such changes shall be effective immediately upon notice, which shall be placed on the Site.
In no event will IndianOil be liable for damages of any kind, including without limitation, direct, incidental or consequential damages (including, but not limited to, damages for lost profits, business interruption and loss of programs or information) arising out of the use of or inability to use IndianOil's website, or any information provided on the website, or in the Products any claim attributable to errors, omissions or other inaccuracies in the Product or interpretations thereof. Some jurisdictions do not allow the limitation or exclusion of liability. Accordingly, some of the above limitations may not apply to the User.
User agrees to indemnify, defend and hold IndianOil harmless from and against all losses, expenses, damages and costs, including reasonable attorneys' fees, arising out of or relating to any misuse by the User of the content and services provided on the Site.
The information contained in the Site has been obtained from sources believed to be reliable. IndianOil disclaims all warranties as to the accuracy, completeness or adequacy of such information.
IndianOil makes no warranty that: (a) the Site will meet your requirements; (b) the Site will be available on an uninterrupted, timely, secure, or error-free basis; (c) the results that may be obtained from the use of the Site or any services offered through the Site will be accurate or reliable.
The User's right to privacy is of paramount importance to IndianOil. Any information provided by the User will not be shared with any third party. IndianOil reserves the right to use the information to provide the User a more personalized online experience.
The Site provides links to web sites and access to content, products and services from third parties, including users, advertisers, affiliates and sponsors of the Site. You agree that IndianOil is not responsible for the availability of, and content provided on, third party web sites. The User is requested to peruse the policies posted by other web sites regarding privacy and other topics before use. IndianOil is not responsible for third party content accessible through the Site, including opinions, advice, statements and advertisements, and User shall bear all risks associated with the use of such content. IndianOil is not responsible for any loss or damage of any sort User may incur from dealing with any third party.

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